Outside Publication

Closed to Abuse, Hedge Funds Review

September 2015

On June 12, 2014, the European Commission published the Market Abuse Regulation (MAR) and the Criminal Sanctions for Market Abuse Directive (CSMAD), together MAD II. This will replace the existing market abuse directive, MAD I, and become directly applicable in European Union countries from July 3, 2016.

MAD I was perceived as having certain deficiencies, which became apparent after the onset of the financial crisis in 2008 and particularly after the Libor manipulation revelations in 2012. According to the Commission, the new rules on market abuse update and strengthen the existing framework in MAD I to ensure market integrity and investor protection. MAR will help keep pace with market developments such as the growth of new trading platforms, including over-the-counter trading and new technology such as high-frequency trading, and the upcoming overhaul of market regulation under the Markets in Financial Instruments Directive (Mifid II).